Nigeria’s biggest banks have realised N3.03 trillion income from treasury bills (T-Bills) in the first six months, which is 60.40 percent higher than 2024’s N1.89 trillion, according to data gathered by MoneyCentral.
Zenith Bank Plc, Access Bank Plc, United Bank Plc, Access Holdings Plc, FirstHolco Plc, FCMB Plc., Fidelity Bank Plc, and Stanbic IBTC Holdings Plc, are in the habit of buying up domestic government bonds that offer among the highest yields in emerging markets.
These juicy yields help lenders earn risk free interest income demand amid tepid credit demand from companies and consumers hampered by challenges in an economy too dependent on oil.
The yield environment is still relatively attractive and treasury income would remain a major income driver for banks in Nigeria, at least over the near to medium term.
That said, not only would expectations of lower monetary policy rate from the Central Bank of Nigeria (CBN) continue to moderate the yield on treasury assets, the system liquidity would continue to sustain yield compression.
Hence, the earnings yield of banks would moderately falter over the next few quarters and so would their overall top and bottom lines, according to Abiola Rasaq, economist and former head of Investor Relations for United Bank for Africa (UBA).
“Hence, banks may see moderate slip in profitability and implied ROE going forward, especially as the window for foreign currency related bumper earnings of the past two years have largely closed,” said Rasaq.
Macroeconomic uncertainties such as inflationary pressures and a pile of unpaid loans are also weighing on banks’ risk appetite.
The yield on Nigeria 10 year bond yield rose to 16.64 percent on September 19, 2025, marking a 0 percentage point increase from the previous session.
Over the past month, the yield has edged up by 0.96 points, though it remains 2.83 points lower than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity.
Nigeria’s headline inflation slowed for the fifth consecutive month in August 2025, providing some respite for consumers grappling with high living costs, according data from the National Bureau of Statistics (NBS).
A breakdown of the figures shows Zenith Bank earned N781.84 billion from investment securities in the first six months, which is 71.08 percent higher than 2024’s N455.07 billion.
United Bank for Africa’s income from government securities spiked by 36.94 percent to N645.63 billion in June 2025 from N471.43 billion as at June 2024.
Guaranty Trust Holding Company Plc realised N374.98 billion in June 2025, which represents a 44.48 percent increase from 2024’s N259.57 billion.
FirstHoldco Plc earned N445.79 billion in income from treasury bills and other investment securities, which is 45.20 percent higher than 2024’s N307.01 billion.
Stanbic IBTC Holdings Plc income from investment securities surged by 133.86 percent to N131.28 billion from N56.13 billion as at June 2024.
FCMB Plc income from government securities spiked by 64.89 percent to N121.16 billion from N73.47 billion as at June 2024.
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